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What Drives People to Start Their Businesses?

If you’ve been thinking about turning your side hustle into a full-time, self-sustaining startup, looking to other small businesses for inspiration is a great place to start.

To help entrepreneurs who are considering launching a new business, SCORE conducted a survey of roughly 1,000 small business startups from across the nation to determine how they got off the ground, what their biggest concerns were, and most importantly, how they managed to attract customers and build their businesses in that all-important first year.

The results were used in SCORE’s fall 2019 “Megaphone of Mainstreet: Startups” data report. Why focus on startups? The number of new business startups is considered a significant factor in the overall economic health of the nation and mentoring small business owners as they embark on their entrepreneurial journey is what we do every day here at SCORE.

Here are some key takeaways (all statistics are taken from the survey).

Small Businesses Are Not Started on a Whim

One of the more interesting points revealed by the survey is that most small businesses are fueled by passion and experience, not unemployment or underemployment at a previous job. In fact, less than 15% of people started their business because of their current or previous employment situation. Besides passion and experience, nearly 30% of people chose to go into business for themselves out of a desire to have the flexibility and autonomy that comes with being their own boss.

Here’s how the numbers broke down when entrepreneurs were asked the main reason why they started their small businesses:

Passion for the product/service I provide (40.2%)

Wanted the flexibility of self-employment (16%)

Saw a gap in the marketplace that I wanted to fill (15.1%)

Unemployment or underemployment at my previous job (14.6%)

Wanted to be my own boss (13.9%)

Startup entrepreneurs relied heavily on their friends, family and mentors for support.

When asked what kept them motivated or inspired when they hit rough patches during the first year, personal support systems were overwhelmingly at the top of the list (respondents were asked to check all that applied).

Personal Marketing Markets Best

Just as personal connections were most important to keeping new business owners motivated and inspired, personal connections also served as the most reliable way for startup entrepreneurs to get new business.

Reaching out to personal networks had a 64.9% success rate among those surveyed, followed closely by speaking at events (59.9% success rate).

Here’s how the field broke down (again, respondents were asked to check all the marketing tactics they used):

68.9% reached out to personal/professional network and had a 64.9% success rate

One of the most intriguing statistics included in the report is that the number of respondents who had at least some paying customers at the end of their first year hovered right around 90%! Interestingly, the report makes sure to note that the vast majority of survey takers were SCORE clients who at some point during their first year had taken advantage of the organization’s mentoring, workshops, and/or online educational resources.

If you’re considering turning your side hustle into a startup and want to be among the 89% of startups who had paying customers at the end of their first year, reach out to a SCORE mentor today, and let’s get started. We’re waiting to hear from you!

About the Author(s)

Bridget Weston is the CEO of the SCORE Association, where she provides executive leadership and works directly and collaboratively with the Board of Directors to establish the vision and direction of SCORE.

Funded, in part, through a Cooperative Agreement with the U.S. Small Business Administration. All opinions, and/or recommendations expressed herein are those of the author(s) and do not necessarily reflect the views of the SBA.